Will 2011 be the year of truly affordable housing in India?

I started 2011 with that same round of questions – What are the affordable housing prospects for 2011? On the face of it, consumers are an annoyed lot because this seems to be a year when housing will become affordable to nobody. Anybody who took loans to buy houses even upto 10 years ago are paying back at interest rates between 13-16 per cent. That seems grossly unfair to a lot of buyers who took loans with fixed tenures in mind and took loans at a particular interest rate. Today the interest rates are at pre-1998 levels when the home loan market was practically non-existent. So did we lure buyers with cheaper home loans and then have we as an industry left them in the lurch? If so we are ready now to do it to another lot of people who have been marginalised from the real estate industry – those who have been looking for a house in the Rs 5-15 lakh category. They may come from formal or informal sectors. Agencies like the Reserve Bank of India and the National Housing Bank are working hard to arrive at a formula for incentivising affordable property construction to the private sector. Yet, the flip side is whether we can hold interest rates to affordable levels in the longer term as this segment may not have the increased paying capacity.

DISCLAIMER : Views expressed above are the author's own.

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E Jayashree Kurup has been a business journalist for over two decades with The Times of India, The Economic Times and Financial Express. She writes on real estate and infrastructure, city management, human resources and management. She is currently the content and research head of Times Business Solutions Limited. Her team at Brix Research, the knowledge centre of the leading property portal magicbricks.com, promoted by the Times Group, gathers and analyses real estate and infrastructure data across 53 Indian cities.

E Jayashree Kurup has been a business journalist for over two decades with The Times of India, The Economic Times and Financial Express. She writes on real . . .